The goal to reform the global trading system stems from persistent dollar overvaluation that creates economic imbalances by making it costly for the U.S. to provide reserve assets and defense while hurting American manufacturing. This analysis examines policy tools available to reshape international trade and financial systems, finding that tariffs can generate revenue with minimal adverse effects when offset by currency adjustments—essentially making tariffed nations finance the costs while improving burden-sharing for reserve asset provision. The study explores both multilateral and unilateral approaches to currency policy, optimal tariff implementation strategies intertwined with national security concerns, and the sequencing of these reforms to minimize market volatility, concluding that significant generational changes to the international economic system are possible through careful policy coordination.
Top comments (1)
Thank you for breaking down how dollar overvaluation impacts both manufacturing and reserve asset provision! Your explanation of how tariffs combined with currency adjustments can shift the burden makes these complex policies so much more understandable.